0
What caused the 700 billion dollar bailout why doesn't the government just freeze all assets involved?
Wiki User
∙ 15y ago
I have erased the previous answer, which was heavily biased and mal/un-informed, and have provided you with a link located just below to a very good video that explains everything for you.
Freezing the assets, as you can see, won't have any effect on the amount of debt incurred.
Wiki User
∙ 15y ago
Add your answer:
Earn +20 pts
How did they vote on the bailout plan?
They voted on the bailout plan just like any bill passed by the government. When the Bill was initially introduced, it had been rejected by the US Senate on Sep 29th 2008. It was then amended and approved by the US Senate on Oct 3rd 2008. President Bush signed the bill into law within hours of its enactment, creating a $700 billion Troubled Assets Relief Program to purchase failing bank assets.. Without majority in the house the bailout would not have come into existence
Where is the 700 billion where did it go specifically?
The purpose of the bailout was to purchase bad assets, reduce uncertainty regarding the worth of the remaining assets, and restore confidence in the credit markets. The federal reserve is buying illiquid assets from large banks & financial institutions.
What is the bailout plan?
The initial bailout plan was for nearly $700 billion. The latest stimulus package is another $250 billion The aim of the bailout plans, stimulus packages etc are to purchase bad assets, reduce uncertainty regarding the worth of the remaining assets, and restore confidence in the credit markets. Below are some reasons for such packages: 1. To Stabilize the economy 2. Improve Liquidity 3. Improve Investor Confidence 4. Reduce the impact of the financial crisis on the US Economy and GDP.
Who was involved in deciding the amount of money and the fine print in the US government's 700 billion dollar bailout financial package?
Both financial analysts from the Department of Treasury and Federal Reserve were involved in the specifics of the rescue package. The 700 billion figure is a maximum that the Treasury is allowed to spend in the purchase of troubled assets. It is improper to state that this is the cost of the rescue package as the Treasury will receive assets which may be worth more in the future than what they paid for them. It is a 700 billion imposed spending ceiling for the program. I would not characterize the plan details as "fine print", something that is hidden from view. What has been reported in the media is that the plan lacks details. I believe this stems from uncertainty in how much is really in trouble (that is must be purchased) and what the worth of these assets may be in the future.
What is the essence of the 700 Billion bail-out plan?
Banks and financial institutions in the US are stuck with a lot of bad debt (Illiquid assets that cant be sold in the open market) This bailout intends on buying such assets from these distressed financial institutions to infuse liquidity into the economy. This money is expected to bring in the much needed cash into the economic system which would revive the economy. Once the economy becomes stable, the government would sell these assets and take back their 700 billion dollars.
What is the 700 billion dollar bailout?
The answer that Warren Buffett gave on CNBC the morning of Sept. 24, 2008 makes sense to me. The bottom line? The bailout is necessary and will probably end up making money. This answer surprises most people and here is the reason. First, the word "bailout" creates the wrong mental picture. Bailout sounds as if the government is going to dip into an existing pool of money, thereby depleting our resources, then give it to individual Wall Street firms as a business grant. This is not what is happening. The 700 billion dollars is not an expenditure at all, it is instead an investment for asset acquisition. The money will be used to purchase existing assets at currently depressed prices and later sell those assets at higher prices. This is why Warren Buffett said on CNBC that he wished he personally held the cash to do this for himself. Only the government, however, has enough capital to do this deal. The deal, however, is attractive as a pure investment.
How much money was involved in the Chrysler bailout?
The below answer is incorrect. Chrysler took about $4 billion before they filed bankruptcy. It will not be paid back. The government has since given them close to $8 million in loans that will have to be paid back, post-bankruptcy. "Actually none. The 1979 "bailout" just guanteed loans that Chrysler got from the private sector. Kinda like having Uncle Sam co-sign for you. As protection, the Feds held Chrysler assets as colateral if they had to start making loan payments on behalf of Chrysler. But the K-car was a big success and Chrysler paid off their government backed loans ahead of schedule."
Why should the US government spend 700 billion of the taxpayer's money to acquire toxic assets of the credit market?
It is because the US economy is under a severe crisis and without the stimulus from the government's bailout package much more financial institutions would declare bankruptcy. Already the economy is in a state of recession and if left uncontrolled it would end up in a depression.
How much has been spent on the bailouts?
The initial bailout plan was for nearly $700 billion. The latest stimulus package is another $250 billion The aim of the bailout plans, stimulus packages etc are to purchase bad assets, reduce uncertainty regarding the worth of the remaining assets, and restore confidence in the credit markets. Below are some reasons for such packages: 1. To Stabilize the economy 2. Improve Liquidity 3. Improve Investor Confidence 4. Reduce the impact of the financial crisis on the US Economy and GDP.
How big is the stimulus package?
The initial bailout plan was for nearly $700 billion. The latest stimulus package is another $250 billion The aim of the bailout plans, stimulus packages etc are to purchase bad assets, reduce uncertainty regarding the worth of the remaining assets, and restore confidence in the credit markets. Below are some reasons for such packages: 1. To Stabilize the economy 2. Improve Liquidity 3. Improve Investor Confidence 4. Reduce the impact of the financial crisis on the US Economy and GDP.
Who is the richestperson in the word?
GUpta - assets 4000000000000000000000 billion$ GUpta - assets 4000000000000000000000 billion$
Why did the government bailout?
The Emergency Economic Stabilization Act of 2008 commonly referred to as a bailout of the U.S. financial system, is a law authorizing the United States Secretary of the Treasury to spend up to US$700 billion to purchase distressed assets, especially mortgage-backed securities, from the nation's banks. The Act was proposed by U.S. President George W. Bush and Treasury Secretary Henry Paulson during the global financial crisis of September-October 2008.The purpose of the plan was to purchase bad assets, reduce uncertainty regarding the worth of the remaining assets, and restore confidence in the credit markets.The Reasons for the Bailout Package:1. To Stabilize the economy2. Improve Liquidity3. Improve Investor Confidence4. Reduce the impact of the financial crisis on the US Economy and GDP.
